The FTSE 100 seems poised to break lower but could Yellen turn the tables?
Before the Easter holiday break the bias in the FTSE 100 was a bearish one and it seems that the sentiment remains negative as markets opened in the red today after the break. The London index that has been trading sideways between the 6,100 and 6,200 points’ levels for the best part of March has been under pressure today and even though the break downwards hasn’t yet occurred it might be tough for the index to avoid it.
The FTSE 100 ended last week with another failed attempt to penetrate the 6,100 points’ support but at the time of typing the index is once again in close proximity of the support level. So my focus is naturally on this attempt and whether the London index will be able to break out successfully and look towards lower levels.
We need to be very careful this week as there is a number of important events coming up and today our attention should be on the Yellen speech in New York. The Fed Chairwoman will be speaking to the Economic Club of NY later today and her comments will set the tone ahead of the Non-Farm Payrolls report on Friday. Depending on how cautious and bearish the Fed chief sounds the stock markets could find renewed support or tumble lower so any premature breakouts might be reversed.
At any case I am focused on the 6,100 points’ support as I mentioned above and should the break take place then my initial target will be around the 6,050 points and a possible extension will take us all the way to the 6,000 points’ area. To the upside we need a clear reversal above the 6,160 points’ area where today’s highs are situated along with the 50 and 200-period moving averages. Should Yellen’s remarks send the stock markets higher again then my trigger is above the 6,160 points and I will be targeting the 6,200 highs.
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